When buying auto insurance, you may be wondering where to start. These days, you can buy insurance from an agent, or even directly online, depending on the provider. But even if you decide to use an agent, which agent should you choose? There are several types of insurance agents, including captive agents who only work with one company, and independent insurance agents who represent multiple companies. So when is an independent insurance agent right for you? Bankrate’s insurance editorial team has created this guide to review the pros and cons of using an independent insurance agent to help you make the best choice for your insurance when buying new insurance.
What is an Independent Insurance Agent?
Independent agents represent multiple insurance companies and offer a wide range of insurance products to meet the consumer’s needs. In addition to auto insurance, independent agents can also help you find life insurance and homeowners insurance. They may also offer similar insurance products across a wide range of companies. Captive agents, on the other hand, only represent one insurance company and offer only the products offered by that particular company.
Benefits of Choosing an Independent Agent
Before you start looking for an independent agent, decide whether an independent agent or a captive agent is right for you. We’ll explain the pros and cons of working with an independent agent to help you make an informed decision.
What are the advantages of an independent insurance agency?
There are several potential advantages when comparing an independent insurance agency vs. a captive agency: There are no additional costs when dealing with an independent agent. It also saves the customer time because the agent can get quotes from multiple insurance companies. An independent agent may be able to find a better deal for your insurance needs than you can. Ultimately, you will need to decide whether these advantages and others are beneficial to you.
Multiple quotes from multiple companies
One of the biggest benefits of using an independent insurance agent is that the agent will get insurance quotes on your behalf, and because they have access to multiple companies, you can see rates and coverages from multiple companies at once.
Using an independent agent saves you time because you only have to provide the relevant information once. An independent insurance agent may also know companies that have the qualities you are looking for, again saving you time and potentially money.
Your agent stays with you even if you change providers
When it’s time to renew your insurance, contact your independent agent if you notice any rate increases. They can help you find competitive rates and decide whether to stay with the same company or switch.
If you change insurance companies, you can stay with the same agent, which allows you to maintain your relationship with an independent insurance agent no matter which insurance company you choose.
Personalized Customer Service
While a captive agent can also provide customer service tailored to the strengths of a particular company, an independent insurance agent tends to work harder to retain your business. That means answering questions about rates, coverage, and claims, handling claims on your behalf, etc. If you ever have a problem with your coverage, you can contact the independent insurance agent to resolve the issue.
Your Best Interest
Independent agents have a legal obligation to act ethically and put their clients’ interests first. After thoroughly reviewing your personal situation and needs, your agent will help you navigate the range of options available to you and find the insurer and product that is best for you.
Small Insurance Companies
Independent insurance agents can work with all types of companies, from small local businesses to large national insurance companies like Progressive and Nationwide. While an independent agent may provide you with insurance quotes from smaller, lesser known companies, they will still meet your needs and provide you with the right coverage for your family.
What are the disadvantages of an independent insurance agency?
Although there are several potential benefits to working with an independent insurance agent, there are also some potential drawbacks.
Policy Knowledge
One of the benefits of working with a captive agent is that they are often experts in the companies they represent, meaning they are knowledgeable about insurance options, coverages, available discounts, how to get the best deal with insurance companies, and more.
Since independent insurance agents represent multiple companies, they may be a little stretched when it comes to detailed knowledge.
Lack of agent support
Independent agents aren’t backed by a major insurance company like captive agents are, so they may have fewer resources easily accessible and may have to seek out training and support more actively.
The decline of major insurance companies
Some of the big name companies, like State Farm, don’t work with independent agents, so while an independent agent can offer products and rates from multiple insurance companies, they may not have access to the specific companies that may interest you.
Potential conflicts of interest
Independent agents have a legal obligation to act in their client’s best interest, but if one insurance company pays higher commissions than the other, this can create a conflict of interest for the agent. To act ethically, agents should present the pros and cons of both insurance companies, regardless of the commission offered.
How to Find an Independent Insurance Agent
You may be able to find an independent insurance agent by simply searching online for “independent insurance agents near me.” Websites such as Yelp and Google Maps may display ratings and reviews of local independent agents. You may also be able to get referrals from friends and colleagues. Another option is to use the “Find an Agent” link on the Independent Insurance Agents and Brokers of America (IIABA) website.
How do I purchase insurance outside of an independent agent?
If you don’t want to use an independent agent or agency, there are other ways to purchase insurance.
- Use a captive agent: If you have a preference for a particular insurance company, or if you have other insurance through a particular company and want to consolidate your coverage, consider using an exclusive agent with that provider rather than an independent agent. Exclusive agents know the companies they represent well and should be able to get you the best insurance rates from them.
- Direct purchase: You can also get quotes and purchase insurance directly from insurance companies, either online or over the phone.
